*Update 28.06.2024: many thanks to the colleagues who got in touch to say that bank account changes are happening quickly and to suggest accounts with the association cooperative financière des fonctionnaires (AMFIE) as an option.*
Original article: If you have a Luxembourg ING bank account please act quickly to ensure that you receive your August salary. We calculate that you must not only have a new account in place but also have it approved within the FiLIP application by Thursday 20.06.2024 to avoid problems. We’ve sent a note to PMO to ask what workarounds they have in place and whether they’re ready for this additional (and sudden) increase in workload.
Context
ING Luxembourg has decided to cease its retail banking services for some 40000[1] private individuals. Instead of a general announcement, it sent messages to individuals from 25.06.2024 announcing that it would close their bank accounts ‘within 2 months’[2]. With no further details and no fixed dates, there were all sorts of suggestions on social media [3] as to why and it took several days (and government intervention) for the explanation to come to light.
A critical matter for those unable to open another account right now
Colleagues affected by this bank-account closure who do not have an alternative bank account available[4] (and the FiLIP request accepted) by Thursday 20.06.2024[5] face the risk of their August salary going into a closed account. This is already a worry, we know. Unfortunately, it gets worse. To this already-fraught situation, add that several of the 5 big competitor banks are swamped with new account requests, provoking a collapse in their systems. Individuals are left waiting for a response to their (repeated) applications, while the clock ticks down on the deadline given for the closure of their ING account.
No margin of error, even for those with an alternative account ready
Even if those affected were able to have a new (or alternative[4]) bank account ready now, according to the current rules[5], their August salary would be the first to be paid into that new bank account, while their ING account would have already been closed on or around 26.07.2024[6]. This means that there is little-to-no margin of error, even for those lucky enough to have another bank account available. Indeed, the Commission FiLIP application explicitly warns against closing a bank account before a successful salary transfer to the new bank account has taken place.
What do we request of PMO?
Generation 2004 has asked that PMO exceptionally process all ING bank account changes made by Luxembourg colleagues in the shortest possible time to ensure staff can receive their August (and subsequent) salary without difficulties. We also ask PMO to publicise this extremely short deadline for bank-account changes to Luxembourg staff and to provide flexibility where possible. Further to this, we propose salary transfers and advances as workarounds for those unable to open a new local bank account within the given timelines.
Potential workarounds
New additional workaround: any account, even in another Member State, can be used for your salary and JSIS payments. Why not have an account in another Member State set up in FiLIP as your main account until you can find an alternative local account?
The salary transfer rules limit transfers made to bank accounts in other Member States to 25% of the basic salary, seriously limiting the potential to use this as a workaround while the Luxembourg banking sector absorbs the former ING clients, would there be any way for PMO to exceptionally circumvent this rule?
Would it be acceptable for colleagues facing difficulties opening a new local account to be given a significant pay advance so that their July salary and (all?) of their August salary are paid into the ING account before its closure? Such an advance might enable them to cover their living costs while trying to open a new alternative bank account.
A perfect storm of dates
Generation 2004 sees a serious mismatch in timelines between the account closures, Commission bank-account verification systems and the time of the month our salary is paid. This perfect storm has the potential to leave Luxembourg staff unable to access their August salary. A failure to address this situation urgently and anticipate the additional workload could create exceptional difficulties in a place of work where many members of staff are already living ‘paycheck to paycheck’[7], potentially pushing staff into situations of hardship.
We ask the PMO to ensure that they are ready for this situation and able to find means for colleagues to receive their salary even if they have been unable to open a new local bank account within the next 2 weeks.
As always, we would love to hear from you. Please do not hesitate to get in touch with us or leave a comment below.
If you appreciate our work, please consider becoming a member of Generation 2004.
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[1] Change of strategy, Situation could get tougher for ING Luxembourg Delano 05.06.2024
[2] ING closes down multiple Luxembourgish accounts ‘unexpectedly’ RTL, 26.05.2024.
[3] ING Luxembourg to explain itself on Wednesday Delano 29.05.2024.
[4] Delano 29.05.2024 estimates 49% of those affected have no other Luxembourg account, but remember that any account, even in another Member State, can be used for your salary and JSIS payments: you can do this until you find an alternative local account.
[5] ‘If you submit your request before the 20th of the current month, your new bank account will be operational from the 15th of the following month.’ Staff matters>’Changing your bank or bank account’
[6] ING Luxembourg has subsequently stated in one source that private accounts will not necessarily be closed immediately, but there is no detail on what this would mean in practice: “Whereas the standard procedure foresees a blocking of the account after two months’ notice, we will make sure that accounts remain accessible to enable our customers to take the necessary actions. ” ING stops Mass Retail Banking services for private individuals in Luxembourg ING, 29.05.2024. For context, any extension would have to be at least 3 weeks long for that account to receive the Commission August salary. The web banking application continues to provide the original 2-month deadline unchanged.
[7] AIRINC, 2019, Study on the cost of living for EU staff posted in Luxembourg; European Commission Corporate Management Board, Corporate Management Board meeting of 30 March 2022 – Flash note : ’12 actions are being proposed to increase the attractiveness of Luxembourg as place of employment’; Luxembourg Times, 24.6.2021, Luxembourg’s housing costs 70% above EU average; Luxembourg Times, 3.6.2021, Luxembourg’s high salaries offset by living costs.
Previous updates
*Update 12.06.2024: many thanks to the colleague who provided the new workaround added below. We have updated the references to ‘local bank account’ to accommodate this new information.*
